- Reason for the increase in revenue
- CEO Stephen Rue's statement
- Continued exclusive offers
NBN Co CEO Stephen Rue said that the company is in great shape--it will have its first positive full-year earnings before interest, tax, depreciation, and amortisation (EBITDA) after a 25% revenue increase.
The company responsible for the National Broadband Network (NBN) is generating higher revenue since March 2020, thanks to the growing demand for higher speed plans.
Factors in the Increase of Revenue
The unexpected lockdowns play a major factor in the increase in revenue. The COVID-19 pandemic forced thousands of Australians to work from home. But aside from that, many people avail NBN plans because of the increase in data capacity allocation to retail service providers (RSPs).
The special promos to existing and future subscribers of NBN plans are intended to run for a short time only. However, the company decided to extend the promos several times last year because the number of people who shift to remote work situations is still rising.
After the promos for increased data allocations ended, NBN Co then gives retailers discounts and rebates to higher speed plans. This new promo gets the attention of more potential subscribers.
The latest batch of special offers includes additional Connectivity Virtual Circuit (CVC) capacity at no cost, along with wholesale pricing rebates, which NBN Co constructed as "discounts" for internet retailers upgrading subscribers to higher speed plans.
The increase in data allowance and retail rebates shuffle NBN's pricing structure. But despite that, reports for the company's financials for the last six months of 2020 shows that they are still on track to meet its FY21 Corporate Plan forecasts.
Statement from NBN Co's CEO
Here's what NBN Co CEO Stephen Rue said in a statement.
"The strong total revenue growth in the first half puts us in solid position to achieve positive full year statutory EBITDA for the first time, which will be a significant financial milestone for the company."
NBN Co's EBITDA for the other half of 2020, as well as subscriber costs, was $424 million. This shows a $1.1 billion turnaround on the $663 million EBITDA loss reported last year.
Now that many people are switching to NBN, the company said that they will continue creating exclusive offers. They will proceed with the model that worked for them. People can expect NBN Co to deliver favourable deals without sacrificing the overall performance of their services.
"We will continue to put our customers at the centre of everything we do. We will support businesses by extending the competitive benefits of NBN to more regions, and we will continue to co-invest with state governments and local councils to help ensure that the benefits of fast broadband are extended to more Australians than ever before," Rue said.
Everything is on track for NBN right now. They are also upgrading fibre connections to deliver a fast and reliable internet connection to their subscribers.